Quote:
Originally Posted by NickyC
"More than half of used car loans now carry loan-to-value ratios (LTVs ) above 120% — that means borrowers owe 20% more than their vehicle is worth…".
I just shake my head at car prices now along with their corresponding interest rates. I would never consider financing a vehicle at anything over 2.5%, but we now have people going 84 months at 7% plus. It's just mind blowing. The financial illiteracy one must possess to sign the line on a "deal" like that is incredible.
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I could care less about the people buying BMW, Mercedes, Ferrari, etc. and getting themselves in financial trouble. But there are people who need a new or used car and have no ability to pay cash and are not able to DIY the repairs on a cheap older car. They may have no choice but to finance for 5, 6 or 7 years. They should look for the best subsidized interest rate, but financial literacy or literacy and education in general are not this country’s best attributes, unfortunately, and sleazy car dealers and loan officers have few compunctions about suggesting payment plans they know or suspect will be unrealistic. I hold those “helping” or “guiding” the customer to just as high or higher an ethics and knowledge standard as the customer themselves.